Friday, December 8, 2023

Council Tax for 2013: Making the best out of a bad situation?

By Myles Cook

The agenda for the Corporate Overview and Scrutiny Committee meeting was dominated by the changes to Council Tax and its related benefit “caused” by the Coalition Government’s localism agenda.

The first subject covered on this subject was the issue of Council Tax exemptions and discretionary discounts that will come into effect as of 1 April 2013.

According to the report delivered to the committee by Martin Hone, Director of Finance and Corporate Governance, Thurrock Council are considering changes to the exemption status of three main classes – Class A (vacant dwellings undergoing major repair works or structural alterations), Class C (vacant dwellings i.e. empty and substantially unfurnished) and Class L (an unoccupied dwelling which has been taken into possession by a mortgage lender).

These exemption classes are of grave importance for Thurrock as the borough has more homes left unoccupied for a period of over two years compared with other authorities consulted. With this in mind, Mr Hone remarked that the proposals were less about income generation and more about getting properties back into use for tenants, a definite need for the borough.

The current exemption for Class A properties is a discount of 100% for up to 12 months whilst Class C exemption is currently a discount of 100% for up to 6 months. The Class L exemption discount is currently undergoing a rethink at national Government level and is also in the middle of a consultation with affected parties. The single person’s discount of 25% was not up for discussion as that was being set nationally and not included in the localism agenda.

During the debate on the various proposals, Cllr Martin Healy remarked that the current levels of exemption discounts are “unduly generous” and that the new discounts should provide an incentive for quicker occupation of empty properties although he was against the idea of getting rid of exemption discounts entirely.

Cllr Wendy Curtis posed the question of properties left empty due to being previously owned by people who died intestate to which Mr Hone replied that there were legal issues that would have to be looked into by the council’s Legal Department as to how these could be acquired.

Cllr Barry Johnson, Vice Chair of the committee, said that all exemptions should be removed although also suggested that, perhaps, Classes A and C could be combined into a single exemption class and that the new class be given a duration of 30 days. Mr Hone commented that the council currently use a national template for exemption classes but that, as of April 2013, these could be changed as part of the localism agenda plans.

Cllr Richard Speight, Chair of the committee, agreed with the points raised by both Cllrs Healy and Johnson. He also added that he was in favour of adopting either a 100% discount for three months or 25% discount for three months on Class C exemptions with a reduction in discounts for Class A exemptions.

Cllr Charlie Key showed concern that changes to the Council Tax exemptions could mean higher rents for tenants as property owners seek to recoup their extra expenditure in extra Council Tax payments. Mr Hone admitted that this might well be a problem. Cllr Speight remarked that he did not want the changes to add further financial burden to the rent payers of Thurrock.

Cllr Johnson was in favour of changing the duration for Class C discounts to 30 days but suggested that Class A needed the term ‘major repair works’ properly defined before any decision could be made on discounts and duration. He also asked for clarification on whether a Class A exemption could be followed up with a Class C on a property to which Mr Hone replied that that was not possible.

Cllr Key urged the committee that the decisions made on this subject should be made with regard to making sure that the most vulnerable tenants are not adversely affected.

The discussion on exemptions was brought to a close with the following decisions – Class C exemption discounts should be 100% for three months, a decision passed by majority vote, and that there is a recommendation of seeking legal advice on the definition of the term ‘major repair works’ before a decision is made regarding Class A exemptions.

The idea of adding a premium to Council Tax bills for long-term empty properties was briefly discussed although Cllr Johnson was not happy with that idea.

The next subject under discussion was the changes to Council Tax Benefit, soon to become known as Council Tax Support. Mr Hone presented some general information on the changes, commenting that the amount available for Council Tax Support would be reduced although pensioner households would remain unaffected by the changes. Mr Hone also remarked that the first £25 of earnings within working age households would be disregarded in the calculation for determining eligibility for Council Tax Support and Child Allowances and child maintenance payments would not be included in the income for households.

It was put to the committee that the deadline for the proposed changes to Council Tax Benefit need to be made is 31 December 2012 or national Government would impose a default scheme upon Thurrock Council. The default scheme would mean 10% less money from central Government, equating to a shortfall of approximately £1.3 million that would have to be found through taking money from other services in Thurrock.

Cllr Speight told the committee that the recommendation from the Task and Finish Group was that the maximum amount of Council Tax Support that should be made available to claimants would be 75% of the resident’s Council Tax bill, meaning that claimants will have to pay 25% of their total bill.

Mr Hone said that if Thurrock accepted the transitional grant from the Department of Communities and Local Government (DCLG), the council could keep Council Tax at its present rate and offer Council Tax Support of up to 80% but that the transitional grant was only for one year and could end up costing the council more money in the long run. The recommendation has been made to reject the transitional grant from the DCLG, as have most authorities in the country.

By offering a maximum of 75% in Council Tax Support, however, does imply there will be an increase of 2% in the Council Tax in the next year according to the report. This is unconfirmed at present and may change closer to the time for setting such figures.

To help vulnerable individuals in Thurrock for whom this will be the first time they will have received a Council Tax bill, the council is trying to push the idea of monthly payments so that such residents are not forced into debt. A recommendation was also put to the committee that the council should re-visit the Fair Debt Policy to ensure vulnerable people are fairly treated. Mr Hone commented that all cases where there is an issue will be examined.

To further help vulnerable residents, a Hardship Fund of approximately £250,000 will be set up and that the money will be ring-fenced. The fund will be reviewed on an annual basis and that the level of available funds would be based on need as far as possible.

Cllr Johnson asked why Thurrock is rejecting the DCLG transitional grant when our partners in Barking and Dagenham are accepting it. Mr Hone pointed out that Thurrock has a higher record of collecting Council Tax from its residents (99.2% currently) than the London borough and that they have a higher amount of needy households, requiring a more generous Council Tax Support.

The recommendations of the committee are to be given to Cabinet next week and then on to the full council meeting on 28 November. The plans put in place will not be able to be changed for 12 months so Thurrock Council is under pressure to get things right. Cllr Speight summed up the Council Tax changes discussion by saying that both Labour and the Conservatives are concerned over the changes that need to be made and the short amount of time that central Government have given authorities to implement them. Cllr Speight remarked that, unfortunately, Thurrock was having to make the best of a bad situation.


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